China Reacts To EU Mobile Telecom Probe
23 May 2013
Posted by: Author: Mary Swire
Source: Mary Swire, (Tax-News.com, Hong Kong)
At a press conference, the Chinese Ministry of Commerce (MOFCOM) spokesman, Shen Danyang, has expressed indignation at the prospective European Union (EU) anti-dumping and anti-subsidy investigations into imports of mobile telecommunications network equipment from China.
Shen emphasized that, if the EU insists on launching the investigations, China will, "in line with World Trade Organization rules and Chinese law, take measures to safeguard its legitimate rights and interests, as well as the interests of Chinese enterprises, for which the EU should bear all the consequences."
It was recently disclosed that the European Commission is considering opening an ex officio investigation into the import from China of mobile telecommunications equipment, which totals around EUR1bn (USD1.29bn) per year. "Ex officio" cases may be launched by the Commission on its own initiative, without the existence of prior complaints from the industry concerned, if it has prima facie evidence of an imported product being subsidized by its country of origin or being sold in the EU at prices lower than its market value.
It was understood that the Commission's decision has been made in principle, but would not be actioned until negotiations were carried out with the Chinese Government.
However, Shen confirmed that China and the EU had maintained communication and undertaken consultations since the second half of last year, and that a high-level EU delegation had visited China not long ago and consulted with MOFCOM on this matter. The delegation, he noted, had said that the consultations were very constructive, and he wondered why the Commission made the decision to investigate now, casting doubt on its sincerity to resolve problems by negotiation.
Shen pointed out that the market share of EU mobile telecommunication enterprises in China is much higher than that of Chinese enterprises in the EU, and that "the trade restriction measures unilaterally taken by the EU will undoubtedly do harm to industrial interests of both sides." In that respect, he believed that most EU member countries, and companies in the sector, disagreed with launching an investigation.